Navigating the evolving seas of cross-border insolvency: The shift towards COMI and the Model Law approach in Hong Kong; Re Global Brands Group Holding Ltd (In Liquidation) [2022] 3 HKLRD 316 (Coram Harris J) [case comment]

Abstract

In cross-border insolvency cases involving foreign liquidators, Hong Kong courts traditionally adhered to two criteria for recognition and assistance: the collective nature of insolvency proceedings and the commencement of such proceedings in the company's place of incorporation. This approach has evolved following Re Global Brands, marking a shift towards considering the company's COMI as a more practical criterion, and highlighting the impracticalities of using the place of incorporation as the primary criterion. Despite the benefits, the COMI Criterion introduces complexities, such as potential non-recognition and conflicting rulings between jurisdictions. There are also questions surrounding the differences between the principle of modified universalism under common law and the UNCITRAL Model Law. This article analyses the impacts brought about by the transition to the COMI Criterion, and encourages consideration of the adoption of the Model Law by Hong Kong in the future.